In today’s Wichita Eagle Chase Billingham has an excellent column explaining the recent changes to panhandling laws in the City of Wichita (Chase Billingham: New laws will criminalize homeless). An assistant professor of sociology at Wichita State University, he makes important observations and warnings about the effect of these laws.

In his column, Billingham notes a problem with the ordinance designed to regulate “aggressive” panhandling: “Importantly, though, the ordinance defines ‘contact’ in an extremely vague manner.” I may have noticed the same problem in this example from Ordinance No. 50-643:

Section 2: “Contact” means the intentional action by any person which attempts to attract the attention of any other person for the purpose of inducing such other person to slow, stop or which obstructs or hinders the movement of such other person to facilitate a transfer of anything to or from either person.

Street theater in New Orleans. Would this be legal in Wichita? Click for larger.What is an example of attracting someone’s attention to induce them to slow or stop? Busking. And it’s designed to encourage — “facilitate” — the transfer of money to the busker.

In the ordinance, the city says its purpose is to “regulate behaviors that are intimidating, threatening or harassing.” At the same time, the city takes actions that work in cross-purposes. In particular, the city has taken steps to allow — if not to encourage — more alcohol consumption. In 2016 laws were changed that both restricted and liberalized alcohol consumption. This year the city lobbied the state for laws that would establish “common consumption areas.” These are geographically-defined areas where free-range drinking is allowed. That is, you can drink outside in public, like on Bourbon Street in New Orleans. Besides Old Town, the city mentioned Delano and College Hill as possible common consumption areas.

There is a reason why cities have long outlawed drinking on the streets and sidewalks. But I guess that no longer applies.

I wonder if the city is running the risk of creating a Disneyland downtown, where everything is planned, staged, and regulated. Our city planners set design standards for buildings, and then use the lure of our tax money to encourage compliance. Is there a purportedly problematic public park interfering with you plans for development? No problem. Just ask the city to redirect your tax dollars away from police and schools so that the park can be rebuilt at no cost to you — in a Disneyland style. Too much crime on the streets? The city will install expensive and obtrusive surveillance systems to protect you, and also to harvest revenue if you forget to activate your turn signal in time.

Vibrant urban areas need organic, grass-roots use of public spaces. It’s a big part of what makes a city a city and not a carefully manicured suburb. It’s knowing that the unexpected could be around any corner and fully embracing that possibility.

Funny thing is, the entities that are pushing for this crackdown on panhandling know this. Visit Indy, Indianapolis Downtown Inc. and Ballard’s administration called for the promotion of organic urban experiences in the Velocity Action Plan released earlier this month.

They want a freer, livelier atmosphere Downtown. They want “guerrilla-style” takeovers of public spaces. They want visitors and residents to be surprised by randomness. In short, they want a true urban environment.

But here’s the inconvenient truth: To get that kind of organic, vibrant urban atmosphere, you cannot control everything. And part of not being able to control everything is that, to a certain extent, you have to accept the good with the bad. The pretty with the ugly.

The mime outside Bankers Life Fieldhouse and the man sitting quietly with a sign asking for money. The woman sprawled on the sidewalk with a cup and the saxophone-playing busker who sends people to the Chatterbox club to hear more jazz.

This is the messiness of an urban environment. It’s not always pretty. But it’s not supposed to be. The people who live Downtown know this. We understand it. It’s why we moved here and not to Carmel.

Today, I supported the settlement “Agreement and Release” between Sedgwick County and county manager Mike Scholes for $205,427. This is exactly 13 months’ salary which is the amount Scholes would be paid during the remainder of his contract which would expire on December 31st, 2019. Note, this contract was renewed in September 2017, or about 15 months ago. At that time, commissioners had the opportunity to not renew Scholes employment contract. Nevertheless, it was renewed. The settlement amount does not include benefits such as vacation, sick leave, cell phone, or car allowance. The amount is roughly equivalent to 9 months’ salary plus benefits. The higher settlement amount was necessary to secure the release. Without the release, the county would have significant risk of additional litigation. For this reason, the attorneys representing the county in this case recommended we accept this settlement with the ‘release’ to eliminate additional financial exposure with potential higher costs to the taxpayer.

In my opinion, Scholes case against the county was substantial. The defense alone could have easily cost the county $150,000 to $300,000 plus Scholes’ legal costs plus any settlement deemed appropriate by a judgement. By supporting this settlement today, Scholes has agreed to drop any civil claim against the county and that puts the issue behind us. We needed to settle the case to save the county further embarrassment and more cost.

In my opinion, the effort to terminate Yost and Scholes was not based on substantive issues but motivated by personal and political reasons. It may have been retaliatory. County policy was violated and due process was ignored. The culmination of these failures collectively cost the taxpayers nearly half a million dollars. Had we not accepted the settlement today, the costs to the county could have been much higher.

Finally, in reference to the statement read by the chairman today, he stated,

“Commissioners Howell, Ranzau, and former commissioner Karl Peterjohn, drove a lot of decisions that have turned out to be very costly to our taxpayers, and when you have these same commissioners supporting multiple threats to sue the county, it just wasn’t right to cost us even more. Those same commissioners have continued for more than 2 months to make unproven allegations about other commissioners including me, it’s time to put all that to rest…. It’s now been 9 weeks, more than 2 months and there’s no further external investigations even if they don’t want to admit that.”

With respect to, “decisions that have proven to be very costly”, I would challenge that statement. Through my advocacy, millions of county dollars have been saved. This is an easily proven fact. In contrast, the actions and comments of some of my colleagues over the last couple of months has directly cost the county nearly half a million dollars.

With respect to the statement that I am “…supporting multiple threats”, please know that I have not supported any threats against the county. That allegation is utterly false. The fact is, the claims against the county are substantial and serious. For two of the commissioners to vote NO on this settlement demonstrates that they are not taking the legal threat seriously or do not understand exposure the actions and comments of those commissioners have caused.

With respect to, “…there’s no further external investigations…” please know the FBI does not inform us of their timeline. The indictment of one of my fellow commissioners took about 14 months from the time the media reported the wiretaps until he was officially indicted. It has been another 7 months since those indictments were released and has yet to go to trial. Just because the FBI has not done something publicly in 2 months does not mean there is not an active investigation. Furthermore, an investigation from the District Attorney’s office regarding Kansas Open Meeting Act for alleged actions related to the effort to terminate Scholes is currently underway.

Share this:

Candidates in Kansas who promise more spending ought to explain just how higher taxes will — purportedly — help the Kansas economy. From November 2016.

Are low taxes important to an economy, especially a state economy? When the Tax Foundation looked at the issue, it concluded this: “In this review of the literature, I find twenty-six such studies going back to 1983, and all but three of those studies, and every study in the last fifteen years, find a negative effect of taxes on growth.”1

Per-capita tax collections, Kansas and nearby states. Click for larger.Many of these studies concerned the national economy and taxes, but some looked at state taxes. When we look at Kansas, we see that Kansas already taxes and spends quite a lot, compared to other states. Nearby is a chart showing per-capita state tax collections in Kansas and Colorado.2

State and Local Government Employee and Payroll. Click for larger.Looking at other data, I found that considering all state and local government employees in proportion to population, Kansas has many, compared to other states, and especially so in education.3

State and local government employment and costs, selected states. Click for larger.From another source of data, I found this: “In the visualization, you can see that Kansas spends quite a bit more than nearby states. Of special interest is Minnesota, which is often used as an example of a high-tax state, and a state with excellent schools and services. But Minnesota spends barely more than Kansas, on a per-person basis. What about Colorado? It seems that Kansans often look to Colorado as a state full of bounty. But Kansas outspends Colorado. Same for New Mexico, Wisconsin, Texas, and — especially — Missouri.”4

Please don’t argue that the economic health of a state is determined by its budget, that is, whether it is balanced or not. And if you want to argue that Kansas has borrowed money through the highway fund and spent it in the general fund: That’s true, and we should not do that. But that action allowed Kansas to keep spending, much like borrowing allows the federal government to keep spending more that it raises through taxes.

Some argue that if the state taxes more, it can spend more, and therefore the economy expands. But: The money taken from Kansans is money that they can’t spend. And if one wants to argue that government spends more carefully and efficiently than do private individuals spending their own money — well, give it a try. Empirically, not many people believe this.

And isn’t government spending the purpose of taxation? Nearby are figures showing Kansas general fund spending. You can see that for two years Kansas spent much more than it collected in revenue, using a large ending balance as the source of funds. If one believes in the Keynesian theory of fiscal effects — which most liberals and progressives do — this “deficit” spending spared spending cuts and therefore boosted the Kansas economy.

Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.

Regarding the spending cuts that some claim: Have there been severe spending cuts in Kansas? While some programs have been trimmed, overall state spending continues on a largely upward trend (for all funds spending) or remains mostly flat (for general fund spending), after accounting for population and inflation.5

Kansas revenue estimate errors. Click for larger.We also hear that the Kansas economy is in bad shape because tax revenue has fallen short of estimates. This is not a good indicator of economic health. Instead, it illustrates the difficulty of economic forecasting. Moreover, the negative estimate variances — revenue shortfalls, in other words — in 2002 to 2003 and 2009 to 2010 were generally much larger in magnitude than those of recent years.6 Remember how the Obama administration told us that without the 2009 stimulus package unemployment would rise to a certain level? Well, the stimulus bill passed, we spent the money, and unemployment was higher than what the administration said it would be without the stimulus. And for a long time, too.7

We also hear that transfers from KDOT — the highway fund — have hurt Kansas, especially in construction jobs. Our state’s two largest newspapers recently editorialized on this matter.8 They correctly reported that Kansas construction jobs were down. But it wasn’t highway construction jobs that caused the loss of jobs, except for a very small portion.

KDOT spending on major road programs. Click for larger version.Furthermore, the state has continued to spend on highway programs, without regard to transfers from the highway fund. When we look at actual spending on roads, we see something different from what is often told. KDOT’s Comprehensive Annual Financial Report shows spending in the categories “Preservation” and “Expansion and Enhancement” has grown rapidly over the past five years. Spending in the category “Maintenance” has been level, while spending on “Modernization” has declined. For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2015 totaled $932,666 million, up from a low of $698,770 in fiscal 2010.

We should not borrow money, place it in the highway fund, and then transfer the funds to the general fund, as the state has done for many years. But actual spending on highways has risen, nonetheless.

Share this:

The merit system of judicial selection in Kansas has sprung a leak, finds the United States Supreme Court. From November 2016.

One of the purported benefits of the merit system of judicial selection in Kansas is that it produces quality jurists who rule on the law, not on their personal beliefs or ideologies.

But a recent case shows otherwise. Following, a selection of dialog between Kansas Attorney General Derek Schmidt and United States Supreme Court Justice Antonin Scalia:1

JUSTICE SCALIA: Did the Kansas Supreme Court read these cases?
MR. SCHMIDT: Perhaps I ought not answer that, Justice Scalia, but —
JUSTICE SCALIA: How can you explain it if — if indeed our prior cases are so clear on the point?
MR. SCHMIDT: Justice Scalia, I, of course, don’t —
JUSTICE SCALIA: They don’t like the death penalty.

Here, in one exchange, Scalia exposes the legal incompetence of the Kansas Supreme Court because they rule based on their policy preferences, not the law. “Did the Kansas Supreme Court read these cases?” That’s a question a law school professor asks a lazy student. It shouldn’t need to be asked of justices on the highest court in Kansas.

But the United States Supreme Court found it necessary to ask if Kansas judges were reading their cases. This is precisely what the merit system is supposed to avoid.

The document explains how such a large number is obtained. It includes three components, explained here: “Direct, indirect, and induced effects sum together to estimate the total economic contribution in the state. Direct effects capture the contribution from agricultural and food products. Indirect effects capture the economic benefit from farms and agricultural businesses purchasing inputs from supporting industries within the state. Induced effects capture the benefits created when employees of farms, agricultural businesses, and the supporting industries spend their wages on goods and services within the state.”

This method of reckoning economic impact is from a model called IMPLAN. It is a proprietary system with methodology and assumptions not open to inspection. It often used by those who are asking government for money or tax breaks. IMPLAN comes up with some real whoppers as to how important an industry is to the economy. When shown these figures, government officials are usually swayed to grant incentives.

There’s a problem, however. Agriculture cannot possibly be responsible for 43 percent of Kansas GDP. The U.S. Bureau of Economic Analysis (BEA) has figures for each state showing the contribution to GDP for industry categories. I’ve gathered the data and calculated percentages for each industry. As you can see, the category “Agriculture, forestry, fishing, and hunting” accounts for $8,136 million or 5.5 percent of Kansas GDP. There are seven other industry categories that rank above agriculture.

Gross Domestic Product for Kansas by Industry.

5.5 percent is a long way from the governor’s claim of 43 percent. It is true that the title of the paper is “Estimated Economic Impact of Agriculture, Food, and Food Processing Sectors.” So consider these industry subsectors:

If we add these to agriculture, we have production worth 9.8 percent of Kansas GDP. This is being overly generous to agriculture. It counts all bars and restaurants as part of the agriculture industry, something that makes no sense.

So how do we take these numbers and pump them up to 43 percent? IMPLAN, that’s how. It’s true that when an industry causes economic activity to occur, it spawns other economic activity. These are the indirect and induced effects that IMPLAN produces. But these numbers are hugely inflated. And when we take all industries, economic activity is counted more than once.

Recall there are seven industry categories ranking above agriculture. When it suits its needs, each of these uses IMPLAN to boost its importance to the state. Consider manufacturing, which at 13.1 percent of GDP is the third-largest industry in Kansas. When manufacturing companies appeal to state or local government for subsidies, they use IMPLAN or related mechanisms to inflate their importance. Almost everyone does this. It’s standard procedure.

Except: When everyone claims the same indirect and induced economic activity, such analysis becomes meaningless. If we added up the IMPLAN-calculated value of each industry to the Kansas economy, we’d end up with a value several times larger than the actual value.

This is what the Kansas Department of Agriculture and Governor Sam Brownback have done. We expect this behavior from companies or local economic development agencies when they appeal for economic development incentives. They need to inflate their importance to gullible government bureaucrats and elected officials. But Governor Brownback doesn’t need to do this, and neither does the Kansas Department of Agriculture. From them, all we want is the truth, and nothing more.

Share this:

A Wichita business newspaper’s editorial ignores the history of our local economy. Even the history that it reported in its own pages. From August 2016.

Of the several problems with a Wichita Business Journal editorial, the worst is the author’s view that now, with the result of the David Dennis/Karl Peterjohn election for Sedgwick County Commission, the Wichita area can return to making progress in economic growth. The article is full of phrases like “good news for anyone in Wichita who values the city’s growth” and “We once took pride, in Wichita and in Kansas, in our record of pragmatic, collaborative economic growth.”1

None of this should be a secret to the editorial writers at the Wichita Business Journal. Two years ago it reported on, and showed, a chart from the Wichita Chamber that is similar to the chart at the end of this article.2 That chart showed slow job growth in the Wichita area. The Chamber used it to campaign for a new sales tax in Wichita.

Why don’t Wichita Business Journal editorial writers understand this? Regardless of one’s view on government’s role in economic development, to write as though we’ve had much growth in Wichita is factually incorrect. It’s not responsible.

An interactive visualization that is the source of the following chart is available here.

Share this:

Cutting spending for higher education, holding K through 12 public school spending steady, sweeping highway money to the general fund, reducing aid to local governments, spending down state reserves, and a huge projected budget gap. Who and when is the following newspaper report referencing?

Under _____ budget for fiscal _____, public schools would continue to receive $3,863 per student in state aid, and higher education would lose only $5 million in general tax dollars, mostly in the central Board of Regents office.

But _____ would take $165 million from highway projects and eliminate $86 million in aid to local governments — on top of the $95 million _____ withheld from highway projects and $48 million _____ kept from cities and counties.

_____ also made a campaign promise to build all projects promised under the state’s 10-year, $13.5 billion transportation program. _____ proposals didn’t say how the Department of Transportation would deal with the loss of funds.

_____ budget also would allow the Kansas Highway Patrol to hire 70 new troopers, give state employees a 1.5 percent pay raise, and prevent the closings of four minimum-security prison units and two inmate boot camps.

Under _____ proposals, total spending in fiscal _____ would decrease about $31 million, or 0.4 percent.

But that figure didn’t convey the seriousness of the state’s budget problems, which some officials have said are the worst since the Great Depression. The gap between expected general tax revenues and spending commitments during the next 18 months is more than $1 billion.

_____ also proposed to help eliminate the gap by spending some $313 million — all but $500,000 — that otherwise would be set aside as emergency cash reserves.

This is coverage from John Hanna of the State of the State Address from Governor Kathleen Sebelius in 2003, where she revealed plans for the fiscal 2004 budget. (Except the blank in “on top of the $95 million _____ withheld from highway projects” refers to her predecessor Bill Graves.) The original article is here.

Share this:

Before wishing for a return to the “good old days,” let’s make sure we understand the record of the Kansas economy. From July 2014.

Some in Kansas are calling for a return to the “moderate” and “reasonable” policies of past leadership, with a particular nostalgia for the tenures of governors Bill Graves and Kathleen Sebelius. But before getting what we wish for, let’s make sure we understand the history of the Kansas economy.

In September 2005 the Center for Economic Development and Business Research at Wichita State University published a report titled “Measuring Economic Performance for the 50 States and the District of Columbia.” The data covers the ten years between 1994 and 2003. For context, Bill Graves became governor of Kansas in 1995 and served for eight years. Following is a sample from that document. It reads:

It is clear that the Kansas economy has not performed well over the past 10 years. With the exception of job creation (middle third), Kansas has ranked among the bottom third of states across economic performance measures. Kansas has performed below the average for the Plains States Region in 5 out of the 6 measures examined as well. (Job growth in Kansas equaled the regional average at 1.4 percent annually.)

Share this:

Comments by two Wichita city council members give citizens more reasons to be cynical and distrusting of politicians. From July 2016.

In a recent Facebook post that someone sent to me, Wichita City Council Member Pete Meitzner (district 2, east Wichita) wrote: “Hmmmm…..of note; Wichita is the only sizable city in Kansas that does not ADD any sales tax on top of the State and Sedgwick County sales tax rate.”

It is astonishing that council member Meitzner would brag of this — that Wichita has no city sales tax. That’s because Meitzner, along with all council members but one, voted to place the sales tax measure on the November 2014 ballot. Wichita voters rejected that sales tax, with 62 percent of voters voting “No.”1

Meitzner is not the only council member to brag of no city sales tax in Wichita. Just a month after the November 2014 election in which Wichita voters rejected the sales tax, Wichita City Council Member James Clendenin (district 3, southeast and south Wichita) said, in a council meeting, “thanks to a vote we just had, [Wichita] has zero municipal sales tax.”2

I wonder: If the Wichita city sales tax had passed, would Meitzner and Clendenin feel the same way?

The answer is “No.” If the sales tax had passed, I believe Wichita city council members Pete Meitzner and James Clendenin would be congratulating themselves on the wisdom and foresight that led them to allow Wichitans to vote on the tax. They would be boasting of their ability to gauge the sentiment of public opinion. They would be proud of the investment they are making in Wichita’s future.

That’s important to remember. The city council, at its initiative, decided to place the sales tax on the ballot. Why would the council do this if it did not believe the tax was a good thing for the city?

Because if the tax would not be good for Wichita, then we have to wonder: Why did the Wichita City Council — including Pete Meitzner and James Clendenin — decide that the people of Wichita should vote on a sales tax? Was it a whim? A flight of fancy? Just a poll to gauge public opinion, without binding meaning?

Anyone can conduct a poll of public opinion. But when the Wichita city council places a measure on the ballot asking whether there should be a sales tax, the results have meaning. The results are binding. There will be a new tax, if a majority of voters agree.

Say, what should we ask the city council to let us vote on this November?

We have to ask: Why would Wichita city council members allow Wichitans to vote on a tax they didn’t — personally — believe in? There is no good answer to this question. So when we see city council members boasting of no city sales tax in Wichita, remember this was not their preference. This is especially important because the city told us we needed to spend $250 million of the tax on a new water supply. Now we know that we can satisfy our future needs by spending much less, at least $100 million less.3

Lily Tomlin once said “No matter how cynical you become, it’s never enough to keep up.” Here we have two Wichita city council members illustrating and reinforcing the truth of Tomlin’s observation.

Share this:

An editorial in the Kansas City Star criticizes a Kansas free-market think tank. From July 2016.

Kansas City Star editorial writer Steve Rose penned a column accusing Kansas Policy Institute of lies and distortions in its analysis and reporting on Kansas government.1 Here, we take a critical look at a few accusations.

Rose: “To what end does the institute spew out its gross distortions? Its stated goal is to shrink government and to dramatically lower taxes. I would add: Regardless of the possible negative effect to services.”

It is axiomatic that government is the worse way to fund and provide services, with a very few exceptions. Why is this? When government spends money, the spending falls into one of two categories: First, it may be politicians and bureaucrats spending someone else’s money on yet someone else. Or, it may be politicians, bureaucrats, and special interest groups spending someone else’s money on themselves. When goods and services are provided by the private sector, it’s either people spending their own money on themselves, or spending their own money on someone else.

In the two latter cases, people have a strong incentive to get good value for their spending. In the first case, indifference and waste is the rule. In the second case — when spending someone else’s money on yourself — greed is the dominant motivation and consideration.2

We all would be better off if we relied less on the state and if more was provided by the private sector. Education is not one of the exceptions where government is a better alternative to private sector provision.

Rose: “The institute knows the public usually does not have either the time or inclination to get the details of the real story. The headline numbers stick, not the long, boring details of the truth.”

Kansas school spending per student, ratio of state aid per pupil to base state aid per pupil, 2014The irony here is that it is our state’s newspapers that have left out the truth. Much reporting and editorializing has focused only on base state aid per pupil.3 While base state aid per pupil did fall, total state spending per pupil rose. Data available from the Kansas State Department of Education shows that the ratio of total state spending to base state aid has generally risen since the adoption of the school finance formula two decades ago. For the school year ending in 1993 the ratio was 0.7, meaning that state aid was less than base state aid. For the school year ending in 2014, the ratio was 1.85, or 2.6 times as much as in 1993. This means that while base state aid per pupil for 2014 was $3,838, total spending by the state was $7,088 per pupil.4

(While the school funding formula has been replaced by the block grants, the weightings were baked into the grant amounts.)

I think that this qualifies as the “long, boring details of the truth” that Rose complains of. I wonder if he understands this. All he has to do is retrieve data from Kansas State Department of Education.

As far as the public’s level of knowledge of school funding, polls commissioned by Kansas Policy Institute show the public grossly uninformed about school finance.5 If you don’t trust a poll administered by Survey USA in which the text of all questions is revealed, know that surveys of the nation produce similar results.6

Rose: “As for the lies about schools, the institute counts in its preposterous $14,000 number non-operating costs such as interest on the debt from bond issues patrons passed in previous elections. It counts contributions to the retirement fund for teachers. It counts pass-through federal money that costs the state nothing.”

Yes, these numbers include interest on debt incurred from borrowing to build school facilities. Rose seems to say this money should not be counted as part of the ongoing cost of schools. But where should it be counted? Capital costs like these can’t be ignored, yet the Kansas school spending establishment often deflects attention from them, contending these costs “don’t get into the classroom.” Irony alert: These costs are the classroom.

Retirement fund costs for teachers? If not for schools and teachers, would the state have this cost? So where should these costs be charged?

Whether we’re spending too much (or not enough) on these items is another matter. But classifying them properly should not be controversial. Rose’s criticism is characteristic of the political class and its enablers. When the actual cost of government is revealed, the response is to attack the messenger, and truth is cast aside.

But Rose is correct about one thing: Pass-through federal money costs the state nothing. It is the state’s taxpayers that pay the federal government so it can send funds back to Kansas as — according to Steve Rose — money without cost.

NAEP scores for Kansas reading, grade four.Finally, Rose defends government services. The public is being “served well,” he says, with “superb services.” I wonder if he’s examined scores for Kansas schoolchildren on the most recent National Assessment of Educational Progress. On this test, which is the same in all states, we find these results: For Kansas white students, 42 percent are proficient in reading at grade four. For Kansas black students, only 15 percent are proficient, and 20 percent of Kansas Hispanic students. Similar gaps appear in reading at grade eight, and in math at grades four and eight.8

I’m not satisfied with this, and I don’t think Steve Rose and the Kansas City Star should be. This is the saddest thing about Rose’s column. It used to be that newspaper editorial writers worked to hold government accountable. Now we have this newspaper making excuses for government and unfactually criticizing those who work for accountability. It’s Kansas schoolchildren, especially poor and minority, that suffer the most.